Websites promote click-and-give charity
As a young analyst at the Bill and Melinda Gates Foundation, Howard Bornstein witnessed the massive philanthropic impact of the Microsoft founder and his wife. Bornstein realized his best chance to have a remotely similar impact would be to sharp...
As a young analyst at the Bill and Melinda Gates Foundation, Howard Bornstein witnessed the massive philanthropic impact of the Microsoft founder and his wife. Bornstein realized his best chance to have a remotely similar impact would be to sharpen the philanthropy of others.
The idea of using the Internet to help people not necessarily give more, but give better, was a goal that Bornstein developed at Stanford's Graduate School of Business with a fellow student -- now business partner -- Deyan Vitanov. Given the $300 billion in annual charitable giving in the United States, "you'd only have to change 1 percent to replicate, in theory, the impact of the entire Gates foundation," Bornstein said.
The Internet has transformed whole sectors of society, but it has had a more limited impact on the world of philanthropy. A recent survey by the Chronicle of Philanthropy found that among the top 400 U.S. charitable groups in 2009, the median share of giving that came through the Internet was just 1 percent. Now, two Silicon Valley websites, Bornstein's myphilanthropedia.org, and allthis.com, have ambitious plans to change that.
"Our goal is really to become the world's single largest charitable force," said Paul V. Weinstein, founder of allthis.com, a kind of eBay for charity that has already been discovered by Hollywood celebrities.
"It's kind of hard to say that with a straight face. But if you look at the power of the Internet and what it can do, if this is even moderately successful, it's totally doable."
Allthis.com allows people to bid on a highly eclectic list of services, ranging from comedian Ben Stiller's offer to record your voice mail greeting, to a dinner date with former Playboy model Christina DeRosa in Beverly Hills, to lunch with highly sought-after executives like Google's chief legal officer, David Drummond. The person offering the service chooses the charity that gets the winning bid.
"It's really new money, that's never existed before, going to a good cause," said Weinstein, a Palo Alto, Calif., veteran of several startups.
To date, there have been a relatively small number of technological successes in the world of philanthropic giving, like using text messages to raise money for victims of the Haiti earthquake.
Lance King, executive vice president with Grenzebach Glier & Associates, a Chicago philanthropic management consulting firm, said that while many nonprofits allow people to donate through their website, few have developed an effective Internet-based strategy to drive new giving, the way presidential candidate Barack Obama did with e-mail and social networking in the 2008 election. Most charities rely on direct mail to attract donors.
"What I have not seen reported is that online giving or social media, any of these technologies, have demonstrated that they are capturing new donors," King said.
Nor have charities succeeded in using the Internet to attract the kind of large, transformative gifts major institutions depend upon. The Chronicle of Philanthropy says the average online gift to the top 400 fundraisers in 2009 was $113.
"For most of these groups, it's a drop in the bucket," said Noelle Barton, the Chronicle's special projects manager.
Still, at least one Silicon Valley company, San Jose-based eBay, seems to be finding success. The company's Giving Works program, which allows buyers and sellers to earmark a part of their eBay transaction for charity, generated $50 million in 2009, enjoying strong growth despite the recession.
The founders of myphilanthropedia.org and allthis.com believe the Internet can "distrupt" -- or radically transform -- philanthropy, the way it has done in so many other industries. A key element of myphilanthropedia.org is its stable of experts -- many of them authorities within the nonprofit sector, including one Nobel laureate -- who evaluate about 200 nonprofits, creating an information archive that donors can use to inform their giving. In a controversial move for the nonprofit world, those evaluations include areas that need improvement, as well as a charity's strengths.
"We believe people should choose a cause with their hearts," said Vitanov, the CEO of myphilanthropedia and a 25-year-old native of Bulgaria whose ideas spill out so quickly that his words can hardly keep pace, "but we want them to pick organizations with their minds."
The site allows people to bundle their online giving in "mutual funds" organized around causes such as homelessness and global warming. It also lets them apportion donations according to the organization's ranking from myphilanthropedia's experts. The idea is that charities would work to improve their rankings, and therefore, their donations. Innovations like those were one reason the Hewlett Foundation provided myphilanthropedia with nearly $500,000 in seed money, part of the foundation's ongoing program to improve philanthropy itself.
"The elephant in the room is that some nonprofits are better than other ones," said Jacob Harold, who heads the foundation's efforts to improve philanthropy.
For allthis.com, the key is using the Internet to make the fundraising pie bigger, even if it involves auctioning some unique things. A few examples: the chance to dress up and sing songs like an Oompa Loompa from "Charlie and the Chocolate Factory," to get a tutorial in online dating or to get skateboard lessons from a pro.
"The key is making that marketplace big enough and diverse enough that everything has a value," Weinstein said.
For Jon Mittelhauser, one of the earliest owners of a sporty Tesla electric roadster, and a founding engineer of Netscape Communications who is considered by many to be one of the fathers of the modern Web browser, allthis.com was a way to give to charity -- and to discover a different way to do it.
He used allthis.com to donate 24 hours at the wheel of his Tesla in exchange for a $300 bid, money that will be donated to the Prevent Cancer Foundation, a nonprofit that supports the prevention and early detection of cancer.
"The bidder got what he wanted, which was a fun day driving the car; it didn't cost me anything, and the charity I care about got some money," Mittelhauser said. "It's an easy way to leverage something you might have, like the car "... rather than just writing a check."
ONLINE GIVING LAST YEAR:
1% -- Median share of donations received from the Internet by the top 400 charitable groups in the U.S. in 2009
$113 -- Average online gift to those groups in 2009
--Source: Chronicle of Philanthropy